You can convert a HELOC to a fixed rate three ways: use your lender’s fixed-rate lock on part or all of the balance, refinance the balance into a fixed-rate home equity loan, or roll it into a cash-out refinance. The lock is usually the cheapest move if your lender offers it, but the fixed rate is typically set higher than your variable rate, and you generally have to do it before the draw period ends.
Our take: Call your lender first and ask if your HELOC has a fixed-rate option. If it does, find out the fee, the minimum amount, how many locks you can hold and the deadline. If it doesn’t, compare a home equity loan against just paying the line down faster.
3 ways to convert a HELOC to a fixed rate
| Option | How it works | Cost to switch | Best for |
|---|---|---|---|
| Fixed-rate lock with your lender | Moves part or all of the balance to a fixed rate and a set payoff term, inside the same HELOC | Often low. Bank of America charges no fee to convert | Anyone whose lender offers it, before the draw period ends |
| Refinance into a home equity loan | A new fixed-rate loan pays off the HELOC | Closing costs, plus any early closure fee on the HELOC | A HELOC with no lock option, or a balance you want gone on a set schedule |
| Cash-out refinance | A new first mortgage pays off your current mortgage and the HELOC | Full mortgage closing costs | Only when the new mortgage rate beats your current one |
Fees and rules vary by lender. Ask for the exact terms in writing.
For most people it comes down to the first two. A cash-out refinance only makes sense when you’d want a new first mortgage anyway, and our breakdown of a first lien HELOC vs a mortgage walks through that math.
How a fixed-rate lock works
Many HELOCs let you convert some or all of the balance from a variable rate to a fixed rate. The fixed rate is usually higher than the variable rate, but it’s more predictable. You get a fixed payment on that chunk until it’s paid off, and the rest of the line stays variable.
Two big banks spell out how theirs work.
| Lender | Fixed-rate option terms |
|---|---|
| Bank of America | Up to 3 Fixed-Rate Loan Options at once. No fee to convert some or all of the balance. The fixed rate is typically set higher than the current variable rate. |
| U.S. Bank | A maximum of 3 active Fixed Rate Options. You have to lock before the end of the draw period, and you can lock online, in the app or by phone. The line has a $75 annual fee after the first year, waived with a Platinum Checking Package. |
Other lenders may charge a fee per lock, set a minimum amount or limit the terms you can pick.
The deadline is the part people miss. U.S. Bank says once you’re in the repayment period, you can’t convert a variable rate to fixed. So if your draw period ends soon, this is a now-or-never call.
Is locking worth it? The math
Here’s a $50,000 balance paid off over 10 years. Say your variable rate is 8% and the lender offers a fixed rate of 9%.
| Scenario | Monthly payment | Total interest | Fixed rate vs this scenario |
|---|---|---|---|
| Lock at 9% fixed | $633.38 | $26,005 | Baseline |
| Stay variable, rate averages 8% | $606.64 | $22,797 | Locking costs $3,209 more |
| Stay variable, rate averages 10% | $660.75 | $29,290 | Locking saves $3,285 |
Our own math with illustrative rates, treating each rate as the average over the full 10 years. Real variable payments change as the rate moves.
So the break-even is simple. Locking at 9% only pays off if your variable rate averages more than 9% over the time you hold the balance.
Think rates will fall? Stay variable. Need a payment you can count on, or can’t afford a jump? The lock is insurance, and the extra $26.74 a month in our example is the price.
If your real goal is getting rid of the balance, our guide on how to pay off a HELOC faster could do more for you than a lock.
How to convert, step by step
- Find your HELOC agreement and check for a fixed-rate or rate-lock feature.
- Call the lender and ask five things: the fee, the minimum amount, how many locks you can hold, which terms you can pick, and the deadline.
- Get today’s fixed rate for each term and compare it with your variable rate.
- Run the break-even. How high would your variable rate have to go before the fixed rate wins?
- If there’s no lock option, get home equity loan quotes and add up the closing costs and any early closure fee on your HELOC.
- Lock the amount you want, pick the shortest term you can afford, and confirm the new payment on your next statement.
See what Figure offers as a fixed-rate alternative.
Watch the early closure fee if you refinance. U.S. Bank, for example, charges 1% of the original line amount, up to $500, if you pay off and close within the first 30 months.
HELOCs that are fixed from the start
Shopping for a new line anyway? Some online lenders build the fixed rate in, so there’s nothing to convert later.
| Lender | How the rate works | Details |
|---|---|---|
| Figure | Borrowers can choose fixed or variable rates | Full draw at closing, terms of 10, 15, 20 or 30 years, minimum credit score 600 |
| Achieve | Lists fixed rate APRs | APRs from 6.10% to 15.17%, terms of 10, 15, 20 or 30 years, 5-year draw period |
| Upstart Home Lending | The line is variable, but the APR on each draw is fixed on the date you make it | APR 6.52% to 18.00%, $26,000 to $250,000, 10 and 15 year terms |
Terms come from each lender’s site. A full draw at closing means you pay interest on the whole amount right away.
The trade-off is flexibility. Several of these want a big draw up front, so read the draw rules before you apply. Our Figure HELOC review, Achieve HELOC review and Upstart HELOC review cover them.
One Figure borrower on Reddit (u/blockmastermo) put it bluntly. Their initial draw was the whole credit limit, which left nothing to draw, and since most of the early payments were interest, the line barely opened back up in the first 5 years. They said they wouldn’t do it again.
When you shouldn’t lock
Locking could make sense if
- Your draw period ends soon and you want a set payment
- You can’t handle a payment jump if rates rise
- You’re carrying a big balance you’ll pay off over years
- The fixed rate is close to your variable rate
Skip it if
- You’ll pay the balance off within a year or two
- The fixed rate is well above your variable rate
- The lock fee eats most of what you’d save
- You expect rates to fall
Bottom line: a fixed-rate lock is cheap insurance against rising rates when your lender offers one, and you lock before the draw period ends. If the fixed rate is far above your variable rate, and you can pay the line down fast, you’re usually better off staying variable.
Fixed-rate HELOC questions
Often, yes. Many lenders let you convert part or all of the balance to a fixed rate during the draw period. If yours doesn’t, you could refinance the balance into a fixed-rate home equity loan or roll it into a cash-out refinance.
It depends on the lender. Bank of America charges no fee to convert some or all of a HELOC balance to a fixed rate. Other lenders may charge a fee per lock, so ask before you do it.
Lenders set a limit. Bank of America allows up to 3 Fixed-Rate Loan Options at once, and U.S. Bank allows a maximum of 3 active Fixed Rate Options.
Usually not. U.S. Bank says you must lock before the end of the draw period, and once you’re in repayment you can’t convert. Other lenders have similar deadlines, so check your agreement.
Usually, yes. The fixed rate is typically set higher than the current variable rate, but the payment won’t change. It’s worth it if you expect your variable rate to average more than the fixed rate.
Only if your HELOC has no lock option or the home equity loan rate is lower after fees. A lock usually costs little to set up, while a home equity loan comes with closing costs, and paying off the HELOC could trigger an early closure fee.
How we put this together
This guide is Banks Done Right’s editorial view. Lock rules and fees come from Bank of America’s and U.S. Bank’s own pages, the general rules come from the Consumer Financial Protection Bureau, and the fixed-rate HELOC details come from Figure, Achieve and Upstart Home Lending.
The 8%, 9% and 10% rates in the break-even example are illustrative, not quotes, and the payments are our own math on a $50,000 balance over 10 years.
Sources
Keep reading
GuidePay Off a HELOC FasterWhat an extra payment saves, worked in dollars.
ComparisonFirst Lien HELOC vs MortgageThe break-even math before you replace yours.
Calculator$100K HELOC PaymentWhat $100,000 costs each month at every rate and term.
Lock options, fees and rates vary by lender and change often. Check your HELOC agreement or ask your lender before you convert.